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US warns EU on using climate change as pretext

Official says it has been an excuse for protectionism

Email|Print| Text size + By James Kanter and Stephen Castle
International Herald Tribune / January 22, 2008

BRUSSELS - The United States warned the European Union yesterday against using climate change as a pretext for protectionism, setting the stage for trans-Atlantic tension over a new package of EU measures to combat global warming.

The pointed comments by the US trade representative, Susan Schwab, after talks in Brussels, came just two days before the European Commission introduced its proposals for cutting EU emissions at least 20 percent from 1990 levels by 2020.

"We have been dismayed at a variety of suggestions where we have seen the climate and the environment being used as an excuse to close markets," Schwab said after discussions with Peter Mandelson, her European counterpart.

President Nicolas Sarkozy of France has called for a carbon tax on imports to ensure that European companies that need to comply with tough environmental rules are not undercut by foreign competitors whose governments are not capping carbon emissions.

EU officials were not expected to propose such a measure tomorrow but were expected to keep alive the possibility of a so-called border tax to keep European industries competitive.

The EU pledge to protect European industry by 2011 at the latest will be aimed at assuaging powerful lobby groups from sectors like steel and aluminum manufacturing, which say they are facing higher costs than their overseas competitors because of the EU's determination to lead the world in climate protection.

Even so, EU officials hope to be able to avoid the issue, not least because any European border tax could be challenged at the World Trade Organization.

Instead, EU officials hope that other developed countries like the United States, which did not sign the Kyoto climate treaty, will join an international treaty by the end of the decade, making protectionist measures unnecessary.

Measures other than the border tax that are under discussion by EU officials and diplomats in Brussels include granting greater numbers of free pollution permits than planned. Officials say they believe such a method would not break world trade rules.

The EU also could condone global agreements within sectors like steel and cement, rather than between nations.

In that scenario, industries worldwide in a particular manufacturing sector would agree to cut their pollution by a certain amount, in theory leveling the competitive playing field.

EU officials say they are optimistic about a global climate accord after the recent meeting of nearly 200 nations in Bali, Indonesia, where agreement was reached on laying out a plan for negotiations that could produce a climate treaty by 2009.

But the Bali Action Plan faces high hurdles, including the persistently thorny problem of convincing the United States to take action even if fast-developing countries like China, which insists on developments getting higher priority than emissions curbs, fail to make similar pledges.

Schwab also took issue with Europe's attitude toward genetically modified foods, which she described as "perfectly safe."

She singled out France's decision to go slowly on cultivation of genetically modified corn.

'We have been dismayed . . . where we have seen the climate and the environment being used.'

US trade representative

ON SHUTTING MARKETS

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